Although the sole trader route, which is commonly referred to as being self employed, is the most popular way of running a business in the UK, there are significant advantages of operating as a limited company.
Here, we highlight 10 of the biggest benefits a limited company gives you over working as self-employed.
When you start a business with someone else, it’s always a good idea to lay down some rules on important issues, such as; how you will run the company, your respective responsibilities and what happens if someone wants to leave the business. Agreeing on how you will handle these, and other important matters, will save a lot of anguish down the line.
If you are going into business with other individuals working under a partnership structure, you should do this with a Partnership Agreement. If you are setting up a limited company, you will a need to record these in a Shareholder’s Agreement.
This guide explains what a Shareholder’s Agreement does, who should get one and what should be included in the document.
National Insurance is a deduction from earnings, set up originally to fund various State benefits such as the NHS, the State pension and other welfare-related schemes.
In reality, it is just another tax. In fact, as standard income tax rates have remained constant for many years, NI rates have soared.
In this guide we look at how National Insurance works, and what your National Insurance Contributions (NICs) will be as a small business owner. (more…)
To clarify the various tax rates, thresholds and allowances that self employed workers, business owners and company directors need to be aware of for tax calculations, here is ByteStart’s summary of the main tax rates, tax bands, and tax allowances for the tax year from 6 April 2016 to 5 April 2017.
These are the rates and thresholds that you will need to use for completing self assessment tax returns for 2016/17.
The deadline for filing a paper tax return for the 2016/17 tax year is 30 October 2017. If you are completing your self assessment online, you have until 31 January to submit your return.
Personal Liability Notices or PLNs first came into effect in April 2009.
Originally, PLNs were predominantly used by HMRC to tackle “phoenixism”, where the assets and the operations of an insolvent business that has run up significant tax debts are transferred to a new company operated by the same management team that has a history of non-payment of tax liabilities. However, HMRC’s use of PLNs is now increasing. (more…)
When you set up a limited company, your annual profits will be subject to Corporation Tax.
Dealing with your corporation tax issues is one of your accountant’s key tasks. However, it is ultimately the directors of a limited who are responsible for ensuring that a company’s tax affairs are in order. (more…)
One of the first, and most important decisions you make when you set up a new business is to decide what type of legal structure you should work under. So which business structure is best for you? (more…)
To help small business owners and company directors stay up to date with all the various tax rates, thresholds and allowances that might be needed for tax calculations, here is ByteStart’s summary of the main tax rates, tax bands, and tax allowances for the tax year from 6 April 2015 to 5 April 2016.
When a company goes into liquidation, it’s generally understood that employees are entitled to redundancy pay. But what about the company directors themselves? Ultimately it is their business that has failed, and their livelihood that has collapsed.
Unbeknown to many directors, the government does provide limited company directors with statutory entitlements, such as redundancy pay, in a number of situations where a limited company has become insolvent and entered liquidation.
With some 80,000 personal insolvencies a year and around 14,000 companies becoming insolvent annually, it’s an issue that many business owners can find themselves facing, but a lack of understanding about statutory entitlements means many limited company directors end up missing out.
We’ve therefore asked Gary Addison, an experienced insolvency and redundancy expert, to explain more about what statutory entitlements actually are, and how they apply to company directors. (more…)
If you have set up in business via a limited company, there are a number of duties you will have – as well as legal and financial responsibilities – if you are a director of the company.
This article provides an overview of what to expect as a limited company director.
Since 6th April 2016, nearly all UK companies have been required to maintain a register of Persons with Significant Control (also known as a “PSC register”).
The PSC register obligations were introduced as part of the Small Business Enterprise and Employment Act 2015. The government’s intention was to enhance corporate transparency where complicated ownership structures can sometimes make it difficult to tell who owns and controls companies.
However, even small limited companies with very simple structures are required to maintain a PSC register. And, from 30th June 2016, companies need to file this information with Companies House as part of the new Confirmation Statement (which replaces the Annual Return from this date).
This guide explains to small business owners what a Person with Significant Control is, how to produce a PSC register and what companies need to do to stay on the right side of the law.
All UK limited companies, large and small, have been required to file an Annual Return (AR01) with Companies House at a set point each year.
From 30th June 2016, as part of the Small Business Enterprise and Employment Act 2015, the Annual Return is replaced with a new document called a ‘Confirmation Statement’.
Like its predecessor the Annual Return, the Confirmation Statement is a snapshot of information about a company which must be provided once per year. Most of the information provided is placed on the public record by Companies House.
Here’s everything that limited company directors need to know about the new Confirmation Statement; (more…)
From 6 April 2016, the way dividend income is taxed will change significantly. The changes will affect hundreds of thousands of small business owners, many of whom will see a big jump in the amount of tax they will have to pay.
At present, company dividends are treated as ‘tax paid’ in the hands of shareholders. However, from April 2016 the tax treatment of dividends will be altered dramatically, and as you can imagine, this isn’t going to result in limited company directors paying less tax! (more…)
Every limited company must submit their accounts to Companies House each financial year. In this article, we look at how you work out the deadline for your first annual accounts.
If you are a limited company director, one of your legal obligations is to ensure that your company’s annual accounts are submitted to Companies House accurately and on time.
The type of structure you use will depend on a number of factors unique to the business you want to start. In this article, we look at the main structures – sole trader, limited company, partnership and LLP and highlight the pros and cons of using each one. (more…)
HMRC are running a series of live webinars to help those that are new to, or considering; going self employed, starting a business, employing staff or becoming a limited company director.
Each webinar covers a distinct topic and will help you to understand the legal implications and the responsibilities involved with the steps you are considering. You can also submit questions to the presenter during a webinar.
The webinars that will be of interest to new business start-ups, both sole traders and limited company directors, and those thinking of employing staff for the first time are detailed here; (more…)
If you are thinking of forming a new limited company, you should be aware of the legal requirements you have to meet as a limited company director, on behalf of the company.
The role of limited company secretary is essentially an administrative one, but can involve a number of important responsibilities depending on the wishes of the company’s directors.